FiltersDone

Question type

Essay

Multiple Choice

Short Answer

True False

Matching

Exam 13: Measuring and Evaluating Financial Performance

Show Answer

Share

---

All types

Filters

Study Flashcards

Question 21

Multiple Choice

Review LaterAdd Note

Review Later

Company X has a P/E ratio of 16 in year 2009 and 16.5 in 2010.In 2011 its P/E ratio is 24.The best way to interpret these data is to conclude that:

A) the shares are overpriced and should be sold.
B) the shares have great growth capacity and should be bought.
C) other financial results and news should be examined to determine the cause of the P/E ratio change.
D) the shares are under-priced and should be bought.

Correct Answer

verified

Show Answer

Question 22

Multiple Choice

Review LaterAdd Note

Review Later

Which of the following measures would assist in assessing the profitability of a company?

A) Quality of income ratio
B) Times interest earned ratio
C) Inventory turnover ratio
D) Capital acquisitions ratio

Correct Answer

verified

Show Answer

Question 23

Multiple Choice

Review LaterAdd Note

Calculate the quality of income ratio for the current year.

If a company extends its payment period for customers,its quality of income ratio is likely to rise. BT: Comprehension

If an analyst wants to examine a company's current ability to generate income,which of the following would best be considered?

If net income is rising,but both sales and the gross profit percentage remain the same,then:

If you wish to examine the relationships among various items reported in one or more of the financial statements,you are most likely to use:

Match the term and the definition.Not all definitions will be used. _____ Ratio analysis _____ Reliability _____ Liquidity _____ Historical cost principle _____ Going-concern problem _____ Profitability _____ Consistency _____ Solvency _____ Trend analysis _____ Revenue recognition principle A.The ability of a company to meet its short-run financial obligations. B.The difficulties a company faces in acquiring financing when first starting up. C.The principle that companies need to adjust their accounts for inflation. D.Also known as time-series analysis. E.The characteristic of financial reporting that requires a company to use the same principles over time to measure financial data. F.The principle that companies should record transactions at the cash-equivalent cost on the date of the transaction. G.The principle that revenues should be recognized immediately upon payment. H.The characteristic that financial results should be able to be independently verified. I.A measure of current earnings performance. J.An analysis that compares a company's results to other companies in the industry. K.A measure of long-run survivability. L.The principle that revenue should be recorded when earned,provided payment is reasonably expected. M.Measures that relate one financial variable to another from the same financial statement. N.The constraint that financial data needs to be similar to other firms in the industry. O.The characteristic that financial information needs to be valuable to decision makers. P.When a company's near-term financial survival is questionable.

Purrfect Pets,Inc.,had 1,588,000,1,662,000 and 1,558,000 shares of outstanding common shares at the end of 2006,2007,and 2008,respectively.Use this information and that set below to calculate the: A.Year-over-year growth rate for the company's sales revenue. B.Year-over-year growth rate for the company's net income. C.Earnings per share for 2007 and 2008. D.Times interest earned ratio for 2007 and 2008.

A company's comparative balance sheets show total assets for 2012 and 2011 as $990,000 and $900,000,respectively.What is the percentage change to be reported in the horizontal analysis?

A decrease in accounts receivable turnover ratio is indicative of:

The P/E ratio for the last 12 months for the company below is most likely to be calculated as which of the following?

Calculate the company's days to collect ratio for the current year?

Nonrecurring items on the income statement are:

The debt-to-assets ratio is the:

Analysts typically use a running four-week average for the shares price in the P/E ratio. BT: Knowledge

If an analyst wanted to examine a company's long-run ability to survive,which of the following would best be considered?

How competitors calculate amortization is most likely to affect comparisons between competitors if property,plant,and equipment:

Match the letter for the following ratio measures to the category of performance that the ratio is used to measure. P - Profitability L - Liquidity S - Solvency ___ Debt-to-assets ratio ___ Receivables turnover ratio ___ Fixed asset turnover ratio ___ Current ratio ___ Return on equity ___ Capital acquisitions ratio ___ Times interest earned ratio ___ Quality of income ratio ___ Inventory turnover ratio ___ Earnings per share

Trend data can be measured in dollar amounts or percentages. BT: Knowledge